How 'What If' Scenario Planning Drives Strategic Agility for FP&A and Planners

Scenario planning is an essential modeling activity that helps FP&A and planners navigate business volatility with confidence.

“What if” scenario planning has become an increasingly crucial activity for financial planning and analysis (FP&A) teams in helping plan for future uncertainty. ?Volatility has become the norm, making continuous planning and monitoring essential. This is where "What If" scenario planning comes into play, providing a powerful exercise for strategic agility and data-driven decision-making.

What is “What if” Scenario Planning?

“What If” scenario planning is an activity that allows FP&A teams and other planners to model best, worst, and likely future outcomes. This ability to quickly create and compare multiple scenarios—such as changes in revenue, expenses, or headcount—enables organizations to navigate uncertainty with confidence. By flexing different assumptions and drivers, businesses can understand the potential impacts on their financials, from cash flow to profit margins, and adjust their strategies accordingly. Scenario planning is typically performed with spreadsheets or enterprise performance management (EPM) solutions such as Workday Adaptive Planning .? As our client, Lara P., Associate Director of FP&A at Vera Therapeutics stated, “The ability to explore multiple scenarios, along with long-range forecasting, was critical to our success.”

Real-Time Insights and Comparisons

FP&A teams need real-time insights that make it easy to compare different scenarios against a baseline, such as the approved budget. For example, planners can simulate a 10% increase in sales in a specific region and immediately see the impact on overall revenue and profit. This instant feedback loop allows for proactive decision-making based on current data, rather than outdated assumptions.

Streamlined Collaboration Across Departments

Scenario planning should be a collaborative exercise. It’s not just for finance—teams from Sales, HR, and other departments can contribute, ensuring that all departments are aligned and making decisions based on the same data. Scenarios should be shared and reviewed collectively, creating a culture of teamwork and strategic alignment.

An Example of Scenario Planning

Consider a scenario where a company is exploring a new market expansion. Using "What If" scenario analysis, the FP&A team can adjust variables like marketing spend, sales forecasts, and staffing needs to assess the financial impact on P&L, cash flow, and the balance sheet. This allows the leadership team to make strategic decisions based on potential ROI and risks.

Continuous Improvement with Scenario Evolution

Scenarios should always be updated as new information becomes available, rather than remaining static. This flexibility means that if a scenario shows promising results, it should be merged into the working budget or approved plan, turning potential challenges into opportunities.

See Scenario Planning in Action

"What If" scenario planning is essential for FP&A teams and planners looking to navigate unpredictable business environments. It enables organizations to anticipate different future scenarios, make informed decisions, and foster collaboration across departments. If you're ready to see scenario planning in action, watch the Scenario Planning: What If, How To, and Why Now? recorded webinar to learn more.

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